Jun 23, 2025
Prepare a Rally in JULY
Three Reasons Markets Rally in JULY
The Next Rally
The first half of 2025 (Jan-June) has been a period of constant fear, uncertainty, and doubt, but the market is shaking this off and is almost back to all-time highs. We've witnessed one of the strongest V-shape recoveries without rate cuts, tax cuts, or deregulation.
Fed Members turn Dovish.
Waller and Bowman have directly advocated for a July rate cut if inflation remains contained.
"We could do this as early as July." - Fed Bowman
"I would advocate for a decrease in the policy rate at our next meeting" - Fed Waller
Three Reasons Interest Rates Fall
- Weak Employment
- Inflation Risks have melted away
- Growth needs a boost
1) Employment is Weakening
Unemployment is creeping higher, and this puts pressure on the Fed to loosen financial conditions by September, maybe as soon as July.
2) Inflation is back to Normal.
Inflation has normalized, and the Spike in Oil has reversed sharply! Tariff inflation has been non-existent.
3) Growth needs a boost
Coincident Growth indicators are flashing weakness.
Liquidity is Strong
Liquidity is strong. The Dollar is breaking down while Global M2 continues to surge!
Interest Rates
Benchmark interest rates remain below 4.5%, enabling the risk environment to feed risk appetite. The event for rates to surge has passed.
👇🏽MACRO REGIME👇🏽
